SIP Trunking or Hosted PBX: Which Is Right for You?

If you’re ready to move your business’s phone system to the cloud, you have a lot of decisions ahead of you.  One of the first (and most important) questions that you’ll face is whether you want to connect your existing phone system to the cloud via SIP trunking, or move your phone system to the cloud with a hosted PBX.

While SIP trunking and hosted PBX (also known as cloud PBX) are both VoIP services, there are some key differentiators that you should understand before you make the choice.  In this quick guide, we’ll compare SIP trunking vs. hosted PBX services, and help you decide which option is best for you!

What is SIP trunking?

SIP trunking is a VoIP service that eliminates the need for traditional phone system setups like the PSTN (public switched telephone network) gateway.  With a SIP trunk, you can connect your existing PBX to the cloud, allowing you to make and receive calls over your data network.  Instead of being routed through traditional phone lines, your long distance calls will go through the Internet to the person that you're calling.

SIP trunking also allows several forms of data (audio, video, etc) to be routed through the same line.  As a result, it is often seen as a more efficient option from both a cost and infrastructure perspective.

In order to take advantage of the benefits of SIP trunking, you will need one of two things:

  • An IP-enabled PBX
  • A VoIP gateway to connect your traditional PBX to the cloud

What is a hosted PBX?

Also known as a cloud PBX, a hosted PBX is a telephone system that eliminates the need for on-premise technology.  Instead, your provider manages this technology and provides their service over the Internet.  Because of this, it’s an extremely cost-effective option.

In addition to traditional features like audio conferencing and call forwarding, a hosted PBX solution offers a range of popular VoIP phone system features that are becoming more and more essential for modern businesses, such as Find Me Follow Me, unified messaging, and more.

Because of the advanced functionality that it provides, a hosted PBX is a good choice for small to medium-sized businesses that are looking for a comprehensive phone system without the hassle of on-site equipment.

SIP Trunking vs. Hosted PBX

So, how does SIP trunking stack up against hosted PBX services?

As with many cloud communications solutions, it really depends on your business's needs.  For example, a business with anywhere from 5 to 20 employees might choose a hosted PBX service.  Larger businesses, or those with international locations, typically benefit from the implementation of one or more SIP trunks.

A lot of businesses choose to implement a combination of both systems to better match their specific needs.  With this combined system, you can connect your on-premise platform while also taking advantage of hosted features to manage your remote users.  By pairing a SIP trunk and hosted PBX, you’ll get the advantages of both systems in one solution.

Both SIP Trunking and hosted PBX have their advantages and disadvantages to a business looking to move their phone system to the cloud.  It’s important to understand the differences between these two systems and completely understand your specific needs in order to choose the one that’s best for your business.